Bluedrop Energy, a South African Gas startup company, has announced its plans to list its shares on the New York Stock Exchange (NYSE) and the Johannesburg Securities Exchange (JSE). The company will first float its shares on the NYSE in 2022, while its JSE listing will follow at a date still to be announced.
In April this year, Bluedrop announced that it had secured a US$20-million (R300-million) funding from J. Sassoon Group, an American private equity and investment firm for the construction of Bluedrop’s “state-of-the-art” smart composite LPG cylinder manufacturing plant. Export-Import Bank (Ex-Im) of the US has also issued a letter of interest providing $36-million (R497-million) finance guarantee in support of J Sassoon Group for this project.
Last month, J. Sassoon Group signed a Technical Services Agreement (TSA) with the South African office of a US-based multinational engineering firm, Fluor Corporation, for the development of Bluedrop’s new LPG cylinder manufacturing plant.
Commenting on the listing, J. Sassoon Group’s chairman, David Sassoon, said: “We are pleased to continue to advise Bluedrop on its next step in its journey. The South African market is in desperate need for foreign capital infusion and this potential floating of Bluedrop’s shares in New York is going to help Bluedrop grow exponentially through asset acquisitions making it one of the leading LPG wholesalers and composite LPG cylinder manufacturers in Africa.
“Unfortunately, there has been a drought of investments in South Africa's capital market, forcing startups like Bluedrop to seek funding from foreign markets. These are opportunities that should be available for local entrepreneurs and investors, unfortunately these opportunities end up being transferred to markets like New York and London. Government has to reenergise local markets, it needs to offer incentives to local investors to unleash local capital, which will encourage foreign investors to invest in South Africa and reduce risk exposure to foreign investors.
“Otherwise, local capital will continue to flow to foreign markets, which makes firms such as ours to have incentives to co-invest with local partners. Co-investment goes beyond just capital, co-investing with local partners allows for the creation of an intellectual highway of ideas, and unlocks more opportunities, all of which fosters cooperation and helps local economies grow exponentially.
“We are in the process of negotiations to secure bulk offtakes for Bluedrop from LPG Suppliers in the US to complement and fulfill critical aspects of Bluedrop's value chain and strategy. The US is a major producer of LPG therefore in J. Sassoon, Bluedrop has the right partners to help them source product from a market spoilt with abundance of this critical energy source.”
J. Sassoon expects to help raise up to $100-million (R1,4-billion) in private placement funding for Bluedrop's second round of funding for its pre-IPO campaign, before its shares float on the NYSE. J. Sassoon Group is advising Bluedrop on its planned initial public offering in collaboration and consultation with its US-based industry partners and a local broker dealer firm in South Africa.
Bluedrop's CEO, Kenneth Maduna remarked: "The listing on the stock market will elevate our profile within the energy sector and investment community. It will surely expand our investor base. It is a value accretive step in the growth of Bluedrop as a relatively new entrant in the energy markets and it fits in perfectly with our acquisitive growth strategy.
“We have a very good launch project and it gives us leverage to build an impressive asset base within this high growth market of LPG in South Africa and the SADC region. We are also humbled by the outpouring of support from the South African government and various sector entities. It gives us great confidence in our business to know that our government and our partners share our vision of LPG being at the critical nerve-centre of the country's energy future.”
Bruce Fein, J. Sassoon Group’s CEO, highlighted that: “Bluedrop is a Cinderella story that is still in the making for South Africa's markets. We remain committed to our agreement with Bluedrop and its success. This is the time for South Africa to shine and grow.”
About Bluedrop Energy
Bluedrop Energy is a 100% black owned South African company manufacturing and servicing LPG Composite Cylinders. The company is also a wholesale supplier and distributor of LPG in South Africa and the entire SADC region. Bluedrop's Composite LPG Cylinders are a modernized superior alternative to the containment of LPG. They are made of polymeric and composite materials which makes them safer, non-explosive, non-corrosive, lighter, saving up to 40% of the weight as opposed to the traditional steel cylinder. They are environmentally friendly because they are recyclable. Bluedrop Energy is a proponent of a cleaner energy future for South Africa and the world at large. Bluedrop will be the first African company to manufacture composite LPG cylinders.
Contact Einat Friedman, J. Sassoon, einatfriedman@jsassoon.com
